Case Law Details
Seiko Watch India Pvt Ltd Vs PCIT (ITAT Bangalore)
ITAT Bangalore held that PCIT duly invoked provisions of section 263 of the Income Tax Act as assessment order was passed by AO without carrying out necessary enquiry/verification.
Facts- PCIT initiated revisionary proceedings u/s. 263 of the Act. PCIT was of the view that the Assessment Order passed u/s. 143(3) was erroneous and prejudicial to the interest of the Revenue as the AO had failed to make enquiries / verification, which should have been made. In this context, the PCIT relied on clause (a) of explanation 2 to section 263 of the Act.
PCIT, by placing reliance on explanation 2 to section 263 of the Act and various judicial pronouncements, held that the AO has not made enquiry which he ought to have made while allowing the deduction of commission payments which was not subjected to TDS u/s. 194H of the Act. PCIT also referred to the Assessment Orders for Assessment Years 2016-17 and 2017-18 wherein similar additions were made u/s. 40(a)(ia) of the Act for non-deduction of the tax u/s. 194H of the Act on such sales incentives. The PCIT concluded by directing the AO to carry out necessary enquiry / verification after giving sufficient opportunity of being heard to the assessee.
Being aggrieved, assessee has filed the present appeal before the Tribunal.
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